The futures traders who managed to stay alert during Tuesday’s lethargic trading session were able to push the March contract below Monday’s $2.08 low and drop the daily close 4.3 cents to $2.074. But the market remained range-bound with very little fundamental news to prompt significant movement. The high for the day was set just after the opening bell at $2.14 and the $2.070 low was reached just prior to the end of regular trading.

Current cold weather across most of the nation is more than tempered by forecasts for a warm-up over the next week and the continuing massive storage surplus.

“The market remains a bear, but the more I look at the longer-term charts the more I believe that the risk has turned up,” said Jay Levine of Advest Inc. “It may take several months to establish a bottom — possibly again probing the $1.76 low — but [I] would overall view further declines as a buying opportunity. I have initial support (where I’d begin to buy) in the $2.04-07 area followed by $1.92 and the long-term support at $1.76 (although I doubt we will get there anytime soon).” Levine said he believes the $2 level will be well supported.

Some observers are looking for signs of significant storage inventory liquidation. Many are expecting the American Gas Association to report a 95-105 Bcf withdrawal from storage today, which would be similar to the 105 Bcf withdrawal during the same week last year. But some see the likelihood that companies holding significant inventories will start to unload in larger quantities to meet contract requirements for seasonal storage cycling. That may mean very little this week, however, because the historical seven-year average for withdrawals is 157 Bcf.

In addition to psychological support at $2, the $1.96 low from last week is seen as further support for the March contract, backed by prior lows on the spot continuation chart at $1.85 and $1.76.

If unexpectedly large weekly withdrawals begin and the market decides to make another run upward, Levine said he sees initial resistance in the $2.17-20 area, followed by intermediate resistance in the $2.50 range and a gap at $2.55.

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